Indonesia economic development(need someone who is major in Economics)
Running head: ECONOMIC DEVELOPMENT 1
ECONOMIC DEVELOPMENT 8
Economic Development
Student’s Name
Institutional Affiliation
History and Brief Backdrop of Indonesia
1. The introduction of indonesia’s econ history is too long. We only need to include a brief and clear background.
2. I think the majority of this paper is still displaying the facts rather than analyze them. Can you have more analysis of the facts you have? We need to focus on analyzing date we have and having our own conclusion rather than displaying facts and quoting others’ words. This paper is not a reading report of others’ research paper.
3. Can you have a main topic to focus on discussing rather than generally introducing the whole economy?
4. The paper should be
a. BRIEF intro of indonesia’s history of econ as a background knowledge
b. Choose a topic to focus on discussing and explain why it is important to the development of econ of Indonesia
c. Grab datas from reliable website like http://hdr.undp.org/en/countries and use the model and concepts to analyze the meaning of the statistics, and how do they reflect the econ situation of Indonesia
d. Base on your analyze, identify the current problem of Indonesia and come up proper and realistic solutions to solve them.
e. Explain why your solutions would be effective by estimating the expected benefits with the concepts and model on my list, and present the whole process of calculation and analyzing.
f. Explain how the country can execute the solutions you suggest, what resource they can use to do that etc.
Indonesia is one of the largest Southeast Asian countries with promising and sizeable economic growth in the region. The government is home to over 270 million people, making it the fourth largest country in terms of the population worldwide. According to Jomo (2019), Indonesia has the largest economy in South East Asia with a GDP of close, slightly over $ 863 billion, and records the highest economic growth of 6% in the region in the last few years. Jomo (2019) asserts that Indonesia, in recent years, has been recording a higher economic development during the global financial crisis than other Great 20 countries. The country has been able to achieve this economic prospects because of its sound macroeconomic policy. The faster economic growth and development of Indonesia has made economic analysts suggest that it will soon be a member of the BRIC group of leading in emerging markets.
To understand Indonesia's economic growth performance, one needs to understand the driving factors behind the economic story. Yudhistira & Sofiyandi (2018) suggest that Indonesia's good economic performance is attributed to the growth of the potent power of consumption, exports, and investments. They further point out that high export is because Indonesia is endowed by abundant natural resources and an increase in international commodity prices. In regards to investments, the country has set and implemented economic policies that stimulate investment and infrastructure development and improvement (Yudhistira & Sofiyandi, 2018). These have enabled Indonesia to create one of the best and conducive business environments that have significantly increased investment. The country's high population makes it among the countries with the highest consumption tendencies, which has formed a platform for economic development. I don’t see this paragraph has strong connection and contribution to the paper.
Solow Model of Economic Development
Investment, high consumption of goods and services, and a large number of exports provide a clear picture of economic growth. However, explaining the determinants of economic growth can be an overwhelming task. When explaining economic growth, someone can think of so many factors that can impact development (Myers, 2017). Not necessary These factors include labor participation, capital stock, trade, human capital, technology, infrastructure, and even corruption can all be potential determinants of economic development. The list can continue growing. Successful analysis of economic growth can be achieved by looking at the fundamental determinants such as the ability to produce goods and services. It is easy to explain economic growth from a production side instead of the demand side (Myers. 2017). This type of analysis can be achieved using the Solow Model of economic growth. The model captures the real way output of economic development is determined by fundamental factors of production labor and capital together with technological progress (Myers, 2017). Can you explain this with more details? You can show the model with a graph …In essence, human capital is a factor that is very influential in regards to economic development. In light of this, this paper delves into providing a comprehensive analysis of Indonesia's economic growth based on the Solow Model with human capital. The paper also discusses relevant economic development issues Indonesia is facing, such as unemployment rates, lack of infrastructure, and increasing health issues.
Solow Model with Human Capital
Economic development in Indonesia is influenced by myriad of factors but it can be concluded that it is affected by basic production factors that influence production of goods and services. Kaddar, ElFadilyb & Najib (2019) asserts that the use of the Solow Model and human capital show that production is influenced by labor, human capital and physical labor together with technology. Based on these considerations, the production function is given by the function Y= F (K, AH) = K∞ (AH) 1-∞ (Kaddar, ElFadilyb & Najib, 2019). In the equation A represents labor and technology that grow in an exponential rate, K is physical capital, and H is skilled labor. The equation suggest that a country accumulates human labor through learning skills of working. In essence, Solow model involves accumulation of capital and production levels meaning that a country can get rich when the rate of investments are high, large population, and high level of technology as provide by K= SKY – dK. In addition, the level of economic development of a country depends on quality of educational systems, work experience, health of labor force, and job training. We need to use solow model to analyze the current economic situation of Indonesia rather than explaining the model’s meaning. We don’t need a paragraph to explain the model.
Economic Indicators
The real GDP data and labor statistics of Indonesia are obtained from Indonesia Statistic Body and the tables produced by World Penn, while, investment data, depreciation rate, and capital stock from perpetual inventory. Yudhistira & Sofiyandi (2018) asserts that the Gross Domestic Product of Indonesia according to Indonesia Statistic Body is worth 1126 U.S dollars in 2019, and this figure represents 0.93% of the world’s total world economy (Jomo, 2019). We don’t need to refer to other people’s words to get the statistics like real GDP, they are available directly from website like http://hdr.undp.org/en/countries , also, can you use 2018’s statistics instead of 2019? Thank you ) The aggregate Gross Domestic Product of Indonesia by 2019 was 3,735.64 billion international dollars, and according to Solow Model of economic development, GDP is an indicator of economic power (Jomo, 2019).i think the quote here is not necessary
The GDP per capita income of Indonesia in the year 2019 was $ 4, 164 nominal, GDP per sector was agriculture 13.7%, services 45.4% and industry 41%. An inflation rate of Indonesia in the year 2018 was at 3.198% (Jomo, 2019). Indonesia purchasing power parity in the year 2018 was measure as 4,749.6 LCU per the international dollars, and this figure has been increasing since 1999 where it was 1,175 LCU per international dollar, which represents a growth rate of an average annual rate of 7.73% (Jomo, 2019). The quality of employment in Indonesia in 2019 was measured to be approximately 4.38%which was an increase of 0.8% as compared to 2018 value of 4.3%. In 2017 and 2016, the unemployment rate in Indonesia was 4.19% and 4.3% respectively. The current birth rate of Indonesia, which is determined by a fertility rate of women is 2.280 births per woman in the year 202, which is a decline of 0.87% from the year 2019 (Jomo, 2019). The fertility rate of Indonesia was 2.3 births per woman and 2.32o births per woman in 2019 and 2018, respectively. The poverty gap index of Indonesia is at $1.90 per day by 2019, which has significantly dropped from $ 27.50 in the year 1984 (Jomo, 2019). We are not displaying all the information, we need to analyze them to discuss an issue that is important to this country. What do these statistics mean for the country? Why are they important? What do the increase or decrease of them mean? And how can we process this data(like use some models or concept from the list) to make them clear to reflect the issue???
Physical Capital Contribution
Investments
In economic theory, physical capital in Indonesia as a factor of production involves raw material endowment, human-made resources, and tangible objects used to produced goods and services. Indonesia creates economic policies that help create and improves the environment that fosters investments from the private sector (Yudhistira & Sofiyandi, 2018). However, general legal uncertainties and corruption are play as main factors reducing the competitiveness of Indonesian climate to investment. Factors such as inflexible labor market, random tax administration, low custom services, and manufacturing that depends so much in labour limits investments in Indonesia. The country’s advantage as far as investment is concerned is the government has implemented economic policies that foster private and foreign investments and infrastructure.
Indonesia policies in the year 2019 increased amounts of assets to about $ 468.5 billion (Kaddar, ElFadilyb & Najib, 2019). Through government initiatives and sponsorship, Indonesia was able to launch a Master Plan for Acceleration and Expansion of economic growth and development. Besides, the country’s legislation was made to ensure that corporate and personal tax is lessened by 2% and 5% respectively, with an effort of promoting investments. Besides, tax for medium and small companies was reduced by 3% and 5% respectively (Jomo, 2019). The government of Indonesia fell tax dividends by 10%, aiming to strengthen the country’s intellectual property rights. According to the Solow Model, the efforts made by the Indonesian government to increase investment creates a platform for an increase in the capital market. For ten years, Indonesia has been experiencing growth in a capital sock (Jomo, 2019). Again, we should not display the facts or conclusion from other people, WE NEED TO ANALYZE and COME UP OUR OWN CONCLUSION
Indonesian Labor
Growth of labor is also related to economic development, where an increase in the level of struggle or human capital indicates periods where a country experiences high economic development. According to the Solow Model of economic growth, a striking increase in labor, the annual GDP per worker increases. Indonesian human capital was at its peak between 1966 -1982 and this is the period the country recorded the highest GDP per work of about 7.7%. This suggests that human capital is significant to the growth and development of Indonesia’s economy. Labor is proven to be always having a positive influence and contribution to economic growth, and the recent growth of Indonesia’s economy is attributed to the availability of skilled and educated considerable labor.
Improving the Current Economic Status
Although some factors such as poverty, corruption, and inflexibility of labor markets are reason to cause Indonesia to worry as far as economic development is concerned, Indonesians have an excellent reason to be upbeat of their economic future (Harahap, Silveira & Khatiwada, 2017). The quote is not necessary. We need to have our own opinion/claim/conclusion base on the analysis of statisitics rather than quoting other’s words! The GDP of the country has been growing and expanding in the rate of 5% to 6% despite the volatility of financial markets and global commodity. The country should improve the number of middle-income and affluent Indonesian households to improve their current economic status. Can you explain the reason, and the expected outcome based on YOUR calculation and analysis? Also, how to improve? Secondly, the government should ensure that it boosts its spending in health care, education, and infrastructure so that annual economic growth is increased to 7% (Harahap, Silveira & Khatiwada, 2017). Again, we should have our own! Indonesia should ensure it converts the good economic gains to improving living standards of the Indonesians. This can be achieved by making sure that wealth is transformed as the measure in GDP to reasonable living standards for the Indonesian by improving levels of education, health care provision, and income inequality (Harahap, Silveira & Khatiwada, 2017).
According to Harahap, Silveira & Khatiwada, (2017), Indonesian can improve the current economic status by improving capacity for innovation. This will provide the country’s economy with a platform to leap from an economy that relies on products and services to one that relies on innovation. Harahap, Silveira & Khatiwada (2017) also adds that, as a developing economy, Indonesia can increase scarce commodity so that enormous skills gaps. Lastly, the country should invest in innovation-driven economy by making higher education more financially accessible to economically disadvantaged students.
References
Jomo, K. S. (2019). Southeast Asia's misunderstood miracle: industrial policy and economic development in Thailand, Malaysia and Indonesia. Routledge.
Kaddar, A., ElFadilyb, S., & Najib, K. (2019). Mathematical analysis of an augmented Solow model. M. Kabil, N. Moussaid and A. Taik Co-chairs of the organizing committee, 159.
Harahap, F., Silveira, S., & Khatiwada, D. (2017). Integrated biorefinery vs. stand alone biodieselproduction in Indonesia–an economic analysis. In 25th European Biomass Conference and Exhibition, 12-15 June 2017, Stockholm, Sweden.
Myers, K. (2017). Income Inequality and the Solow Model. Omicron Delta Epsilon, 48(1), 52.
McCarthy, J. F., & Robinson, K. (2016). Land, economic development, social justice and environmental management in Indonesia: The search for the people’s sovereignty. Land and development in Indonesia: Searching for the people’s sovereignty, 1-34.
Yudhistira, M. H., & Sofiyandi, Y. (2018). Seaport status, port access, and regional economic development in Indonesia. Maritime Economics & Logistics, 20(4), 549-568.